To achieve the highest possible levels of profitability, it’s necessary for businesses to have a well-organized and properly managed inventory. This is true for all the elements in an organization’s supply chain, from raw materials to products to finished goods.
This is also true for spare parts, particularly in asset-intensive industries.
Without the right spare parts on hand, disaster could occur without warning, threatening the bottom line and the financial security of all of your employees. On the other hand, having too many spare parts, or spare parts located in the wrong places, can also drive up costs.
One thing is certain: success in business depends in large part on being prepared and organized, and there’s no better way to achieve that than to have a well-stocked and well-organized spare parts inventory system (also known as an MRO inventory management solution) in place.
Why is Spare Parts Inventory Management So Important?
A spare parts inventory includes all of the materials, supplies, parts, components and equipment necessary for manufacturing. This is also referred to as an organization’s Maintenance, Repair and Operations (MRO) inventory.
Avoiding costly production shutdowns requires that all necessary spare parts be properly identified and well-stocked in advance of any issues, and the best way to ensure your spare parts inventory is ready for any eventuality is to have a robust MRO inventory management strategy in place.
Of course, spare part inventory management is not possible without a modern, well-designed and industry-customized MRO inventory management software system tying everything together, but we’ll get into the intricacies of a computerized maintenance management system later on.
The point is, without the ability to do routine maintenance (or more importantly, emergency maintenance) on your machines and operating equipment when needed, bottlenecks can occur, labor costs shoot through the roof, and unnecessary costs can skyrocket.
A good MRO inventory management program should focus on improving your inventory mix, all while recognizing the reality of your organization’s finite amount of working capital, and the importance of spending every dollar well.
How Does Spare Parts Inventory Management Work?
Spare parts inventory management involves more than simply keeping enough spare parts on hand – in today’s business world it is essential that asset management is understood from a more holistic perspective. This philosophy demands developing strategies that go beyond stocking shelves with parts, and instead also incorporates:
- End-to-end lifecycle strategies for the introduction of new parts and components
- Factoring in equipment renewals, part obsolescence and lead times
- Integrating a robust inventory tracking and inventory accuracy system
- Ensuring this system can be understood and used by your entire maintenance team
A robust inventory control system will also require a number of other elements, including:
- Identification: Systematically identifying all the parts you have using a labelling methodology that uses common taxonomies to ensure there are no duplicates
- Prioritization: Classifying inventory stock according to their value, use and demand, with the most critical components stocked at appropriate inventory levels
- Standardization: Developing regularized work order processes that help avoid inventory inaccuracies due to human error
- Preparation: Performing periodic cycle counts to audit specific product groupings to ensure inventory accuracy within your warehouses or storage facilities
By leveraging the data that already exists and putting best-practices into place that utilize that data properly, your organization can improve their decision making process to improve stocking strategies, purchasing alternatives, target availability and ensuring that you remove the guesswork from materials planning.
How Can an Inventory Management Software Help?
With technological improvements allowing for automated condition monitoring, it is easier than ever to obtain real-time information on every aspect of your operations.
But without integrating that valuable data into an overarching enterprise asset management strategy and software solution, the value is left unrealized.From this perspective, it’s clear that a spare parts inventory management system represents only one aspect of a larger whole.
But in the end, upgrading your spare parts inventory management system is necessary to reduce equipment downtime, drive efficiencies and boost cost savings.
How Xtivity Can Help
Not sure where to start? How about with a consultation with an expert!